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A weekly podcast about the forces shaping politics, power and technology, and how they affect you.
Elliot Costello (00:00)
We need to break apart the myth that this sort of startup
enterprising, entrepreneurial community is here for us, here to build products and services for us. They're not. They're building products for themselves to accumulate power, profit. And it's a race between a handful of individuals to become that supreme dominant power.
Matt Kendall (00:29)
Hello and welcome to Worth Knowing, a weekly podcast about the forces shaping politics, power and technology and how they affect you. I'm Matt Kendall.
Elliot Costello (00:39)
And I'm Elliot Costello.
Matt Kendall (00:40)
So Elliot, what are we getting into this week?
Elliot Costello (00:43)
A topic exploring how major technology influences and changes the state. And it's kind of the role reversal from the original story we all told and sold by Silicon Valley that
technology were just disruptive sort of innovators that were there to, you know, sit on the side. now they're the incumbent. They're part of the status quo. They hold and contain vast amounts of political power and they are the trillionaires in our modern day economy.
Matt Kendall (01:18)
Yeah, it's it's interesting hearing you say that. the image or the symbol that comes to mind for me on that is really that moment at Trump's inauguration in tw beginning of twenty twenty five, where you had Elon Musk, Sundar Pachaya, Google CEO, Jeff Bezos, Mark Zuckerberg, kind of their front row, in a place that's normally reserved for
elected officials and almost there you know some have sort of said it was a a bit of a a humiliation ritual for for Trump to sort of say, look, these guys were against me last time, now they've come here to to bend the knee and kiss the ring. But the the symbolism there for me was just really you know, it was almost like they were the they're the high priests there at the coronation of the king. And if you sort of go back into history
Quite often it was the the the clergy, the archbishops that quite often were manoeuvring around the king's court, quite often to have a say as to who the monarch was going to be, and then become their advisers in the king's court. And it really gave off that kind of vibe to me,
Elliot Costello (02:29)
Yeah, I mean, the irony was clear for probably most of them that I wouldn't say fought against, but certainly opposed to a degree Trump one point in two thousand and sixteen to be sitting behind him and really there to kiss the ring. so you you talk about the history and the importance of that moment. if if you take yourself back to the American Revolution in the seventeen seventies, which was primarily a political revolution to allow
the founding fathers to break away from the political structures in Europe, which was of course the monarchy, and to form a republic. What followed the political revolution was a almost religious revolution where by the seventeen eighties, the founding fathers said that did they did want a different relationship between the state and the church. And that difference was what they were observing a lot of the sort of religious
Rebellions to a degree that's escaped to the New America. They wanted something that's reflected a difference away from the Roman Catholic Church and how it interfered with the state in continental Europe and of course the the Church of England in the UK. The irony for the Founding Fathers is all the sort of concerns and and and fears of what a church would do to infiltrate a state.
We're now seeing that the private sector is able to do that through the state. And so the they've been able to put up the guardrails and that wall between the church and state, but the walls between the private and public sector have now sort of crumbled down.
Matt Kendall (04:09)
I suppose wealthy billionaires, corporates have always had an influence on our politics. But this this does feel different. I mean, even if you look, let's let's look at our own politics, you know, the the corporate lobby groups in particular, you know, we we don't have tech oligarchs, but we have our mining magnates.
They've always really thrown their weight around in our political scene. on the right, we've got we've got the likes of Gina Reinhart and Clive Palmer, really using their money to to influence our politics. even Twiggy Forrest is pr he's a bit more progressive, but he he he really does lobby and and try to influence the government. I think this is this is different. and
Elliot Costello (04:50)
Mm-hmm.
Matt Kendall (04:50)
i e even similar with media, you know, we've got Kerry Stokes at Channel Seven, we had Kerry Packer before.
obviously Murdoch has been a massive influence. But this has been like a the an exertion of pressure from the outside. And I think what we're looking at here, because quite often the the way government or in particular the US government is starting to exert its power through is using tech more and more in order to ex to display that power, there there's a difference
Elliot Costello (05:19)
Mm.
Matt Kendall (05:19)
of of kind in in this instance.
Elliot Costello (05:22)
Yeah. You you'll you'll never your your point is the differentiation between inside the government and outside the government. You'll never avoid private vested interests trying to push a narrative from the outside. that's almost part and parcel with the private sector. It needs to influence policymakers to drive better outcomes for their industry. Sometimes it's done through get gray gifts, sometimes it's done through the revolving door.
There's a whole series of episodes we'll go into there understanding how, you know, political gifts work and the the sort of the borderline corruption. But what we're talking about here today is the relationship has changed because some of that power has come inside.
And a good example is and I'm I'm sure you've, you know, read a lot about Peter Thiel and the way his VC network has been able to identify emerging leaders.
across the US and like a VC, taken a bet on an emerging talent and been able to sort of fund, craft, develop and in shape them to become political leaders of the day. So Bloomberg last year estimated that sixteen people within the Trump administration were funded and really propped up by Peter Thiel and his network.
the the greatest asset of course of the greatest asset of all is of course J D Vance, the vice president, who was plucked out of college by Thiel and his network and provided the support and funding to go on to become the vice president of the United States.
Matt Kendall (07:03)
Yeah, Peter Thiel is is definitely a central character in this and we could quite easily do a whole episode on him, which we won't in this instance, but but we will and we will in
Elliot Costello (07:10)
and we will at some stage.
Matt Kendall (07:13)
some stage. and I thought I think before we even do something like that, I really do want to read Gil Duren's book, The Nerd Reich, which has just been released recently. I will share it in the show notes. That's something I do want to get across before we do an episode on that. But really interesting listening to him.
Some of the interviews he's been doing in order to promote that book is he talks about how Peter Thiel I just for in case anybody d you know is not following tech really closely, Peter Thiel is part of the PayPal Mafia, part of one of the founding teams. Obviously, PayPal was sold for a lot of money. And then essentially that whole group then went on to pretty much become the who's who of Silicon Valley investing.
across a whole bunch of unicorns and hyperscalers, and in particular Peter Thiel I mean he was early and founding investor of in Facebook, OpenAI, SpaceX, and really importantly, companies like Palantir and Anduril which are enmeshed in America's defense and national security apparatus. and in in the book, Gil Duren talks about how he created
JD Vance out of whole cloth. You know, he
Elliot Costello (08:27)
Mm-hmm.
Matt Kendall (08:27)
came along to JD Vance came along to a Peter Thiel speech at Yale. He dropped out, Peter Thiel set him up with a venture capital fund. He made his millions, then funded his 2022 Senate campaign, and then along with David Sachs, another PayPal mafia alumna, essentially pushed him into this vice president position.
And when you think about, you know, even David Sachs himself did a lot of fundraising for Trump
and then is the AI and crypto czar and it pretty much has gone in there to run an agenda
of minimal regulation for both crypto and for AI.
Elliot Costello (09:09)
Yeah. look, it's it's very tempting with an episode like this to sort of grab individuals and go through them one by one. And it's hard not to. you've mentioned Thiel, Sachs. It's impossible not to mention the role that Zuckerberg has played. certainly Musk, Bezos. they all deserve an episode on on themselves. but
Trying to provide context whilst also stay high level.
What what we're really identifying here is the conflict of interest. So if you are controlling a industry, and a lot of these technology companies do control industries, so means of communication, having the having a personality inside the administration or a direct role like yourself, as Elon Musk did as head of the DOGE.
Department of Government Efficiency creates such a conflict of interest. So the clearest thing is wild. So if you think about what DOGE
Matt Kendall (10:09)
egregious. Absolutely egregious.
Elliot Costello (10:14)
set out to do, which was to cut spending to try and minimize America's spiraling debt, which is last week hit forty trillion dollars. so DOGE clearly hasn't worked. You know, it went in and we've talked about the egregious cuts to USAID, but part of of the cuts included
the he got the keys to the the regulators who were investigating some of his companies or who had information on his companies and he just went in and stripped out the people and cut them. Now the conflict of interest there is wild. And that's a role that a private entrepreneur or a private citizen should never play. The public there has to be a wall between the public and private sector to ensure there is a separation of power and
provide those guardrails and the safety net for citizens not to be at risk of corruption by private citizens.
Matt Kendall (11:09)
Yeah. And another worrying aspect of that is is that the DOGE team, which once again were part of SpaceX, they were connected to Musk and or Peter Thiel as ex Anduril or Palantir employees. And they had access to private citizen data, financial, all sorts of of of information that really should be private. And we can only speculate what they got and what they're going to do with it.
Elliot Costello (11:38)
Yeah. Yeah. No, absolutely. So I mean, therein lies part of the problem.
I I'd I wanna just as we're talking about this too, I just want to go back to the thesis around this shift in story, which is really what it is. If you think back to the the sort of the nineteen nineties, early two thousands, we were sold this narrative that everything coming out of the Silicon Valley is for the betterment of society. So innovators, disruptors, pioneers, you couldn't trust
Corporate America, which was baked in sort of Wall Street scandal. If
Matt Kendall (12:12)
The elite.
Elliot Costello (12:12)
you look at Enron and you know the what happened in the early 2000s, that Silicon Valley offered this sort of optimism, you know, take us, come on our journey, buy our products, engage in our service, they're generally free and we're gonna make a better world. the shift has been remarkably quick away from the promise and the story.
to the grappling and the transition towards power. And it's case by case, and I don't want to illuminate the the individual case too much. You know, Bezos was probably the latest in, you know, moving away from the Wall Street the what's the recommendation
Matt Kendall (12:51)
Washington Post.
Elliot Costello (12:53)
they give? The presidential endorsements they make.
Matt Kendall (12:55)
Mm.
Elliot Costello (12:55)
you know, they he walked away from that, the twenty twenty four election. Musk has been on this journey for a
a while and you know has weaponized Twitter in this regard. Zuckerberg's just quite interesting because Zuckerberg, geez is a confusing character, but if you have read Sarah Wins Wilson's book, Careless People, she gives this incredible story of about three months after the 2016 election, flying down to the APEC conference in Lima in Peru.
And how Zuckerberg refused to believe that Facebook had anything to do with Trump winning the 2016 election. So this would have been early 2017. And his team, including Sarah, who was global head of policy, had to explain: no, we we put people from Facebook in the Trump campaign and they weaponized our algorithm to allow Trump to win. And what happened at that global summit,
it was for years before Sarah had been trying to pull Mark in and get him to build relationships at Davos and Apex and UN and everything else, and he'd always been reluctant. Tech entrepreneur, I'm not interested. That's head of state, that's government. And the head of states had not been really interested in Zuckerberg either. he's just a tech guy, he's a kid, blah, blah, blah. The moment that these leaders realized the power Facebook had in supporting Trump,
to win the twenty sixteen election, weaponizing the campaign for Trump's benefit, the power shifted. And Zuckerberg was the most popular person in the room. They all turned up to his session. They all wanted to kiss the ring, including our former Prime Minister Malcolm Turnbull. Incredible stories were told of that transition and change in mindset. Except for the outgoing US President Barack Obama, who pulled Mark aside just at Lima University and scolded him.
For the way that his platform had impacted democracy in the 2016 election. And Sarah talks about Mark's feeling after of being so pissed off and so outraged that Barack Obama could blame him for Trump's election. And you can see the shift and change since. There's been no effort, and and this is not my opinion, this is from people inside Facebook who have come out and told the truth.
As recently as last week, one of the leaders at Instagram who's now testified against Meta in the open case that they're they're they're fighting in Philadelphia, how their tools are built not to protect society but to serve the interests of Mark and what Mark wants, Mark gets.
Matt Kendall (15:38)
Yeah, it is interesting to have that much power and money and still have incr such an incredibly fragile ego, isn't it? there's a similar there's a similar
Elliot Costello (15:46)
Yeah.
Matt Kendall (15:47)
villain origin story around Musk when the Biden
Elliot Costello (15:50)
Mm.
Matt Kendall (15:50)
administration didn't invite him to like an an electric car conference and there were there were reasons inverted commas, that he wasn't. and with you know, the rest as they say is history, that was they say a a turning point where
Elliot Costello (16:03)
What what were the reasons?
Matt Kendall (16:06)
well, for a start, there was a a union element to it because I was speaking about but
Elliot Costello (16:10)
Mm.
Matt Kendall (16:10)
it was also even though it was about electric vehicles, it was talking about emission, the emissions from from internal combustion engine cars as well. So it was look i on the one hand it was an o it was an oversight and obviously an e an expensive one for the Dems.
Elliot Costello (16:27)
Mm.
Matt Kendall (16:28)
but I think look there it it does belie fact that
I think a lot of these we thought that a lot of these tech leaders were, you know, I think at at best a lot of them were just libertarian, right? It was kinda like minimal government. And then except for now, now that they can control like, well now hold on a second, let's, you know, let's go in all in on my style of government. but I think also they did give across this warm and fuzzy feeling, you know,
Elliot Costello (16:56)
Mm.
Matt Kendall (16:56)
to come they they did incredible, you know, incredible branding, you know, they've
Got their hoodies and their t-shirts, they're not the austere corporate types, coming across very thoughtful all the time. when really, you know, they're they're as they're sheep in wolves' clothing. You know, really they they they they they're not out to better society or to make the world a better place. That's all branding and positioning. Really,
Elliot Costello (17:22)
Mm.
Matt Kendall (17:22)
they are out to make as much better.
bank as they can and to make sure that their their share price goes up, up and to the right.
Elliot Costello (17:30)
Yeah, well there lies the danger. And
I mean me media and communication companies have always held government to account. That that's kind of their role. And in in that system and in that expectation, editors have always held an enormous amount of influence. we we know that. for good reasons.
The difficulty and change is that there's a shift now away from editors being human within sort of media organizations to algorithms and worse yet.
Those algorithms are owned by individuals that we're talking about. So these are the centralization of power and then the outsourcing of the editing to algorithms versus, you know, a company that's ever going to be independent and critical of a government.
Matt Kendall (18:19)
Yeah, I saw a great interview with Yuval Noah Yahari about this where he s he talks about that that that curatorial power of editors to over the the narratives and the the messages that we receive and the stories that are told within a culture. and whereas before editors had they had names, they had profiles, they had people, they could be held to account. Quite often they're adhering to journalistic standards or editorial.
policies that they could speak to and we could all understand and we could see where they were coming from. And what these algorithms are, they, you know, it's it's well known that these are black boxes. It's commercial inconfidence in terms of, you know, what they sub what they suppress and what they elevate. But what we do know is that they promote engagement. They need to. That's the business model. So
Elliot Costello (19:14)
Yeah.
Matt Kendall (19:14)
they will promote whatever gets engagement.
Because that keeps people on the feed, that gets more eyeballs for the advertising that they can then on sell to their customers. And that's how they make their money. Now, the issue that has been well reported is that these algorithms you know, race to the bottom of the brainstend to our lizard brain. They quite often promote the things that outrage us. We will share things that outrage us. And so there's a bias to that, and that has affected our discourse, our politics, our culture.
Yeah, the culture wars just play out every single day on these platforms. We all know that. I guess what we don't know is that, you know, if you look at it, you've got Elon Musk controls the the the Twitter algorithm and he's already manipulated that to make sure everybody sees his posts after once again the the fragile ego. I think it was a baseball game where Biden or or football game, I guess it was a s it was and yeah.
Elliot Costello (20:13)
A NFL football game where Biden got more views.
Yeah.
Matt Kendall (20:17)
Yeah, exactly. And so, you know, he got the Twitter engineers to effectively alter the algorith algorithm to make sure that he's posts the scene by everybody. I'm sure that's not the only way he's altered it. Zuckerberg controls Facebook, Instagram, and and threads, which has increasingly become a more progressive alternative to Twitter. then Google has Google has YouTube. and then you've got Larry Ellison who
Elliot Costello (20:44)
El Allison has
TikTok. Al Larry Allison
Matt Kendall (20:46)
Yeah, yeah.
Elliot Costello (20:47)
just bought TikTok in the US, you know. The the the probably the main challenger. Obviously Chinese owned Bidance had owned that, but Trump forced a sale in the US and that's now owned by a tech oligarch. Yeah.
Matt Kendall (21:01)
He's by his mates. And
and Ellison now also has through owning Paramount, or has also pretty much changed over the editorial direction of CBS.
Elliot Costello (21:12)
C N N. Yep.
Matt Kendall (21:13)
will will own CNN.
Elliot Costello (21:15)
Yep.
Matt Kendall (21:16)
you know, so there is they've got the the tendrils are everywhere. we
Elliot Costello (21:20)
Mm.
Matt Kendall (21:20)
don't know, you know, ca will they put do they how to what extent that they put their thumbs on the scale with these algorithms in terms of the messaging that we're receiving. And it's not just
The algorithmic media. You know, Google is is is also our j our our search. So it's the it's the information that it kicks up whenever whenever we sit put search terms into Google search. They've got our emails. I think 50% of consumer emails are on Gmail. so included.
Elliot Costello (21:49)
Yeah, you and I, Matt. You and I, we're we're in that fifty.
Matt Kendall (21:54)
Exactly.
So if you sort of if you then sort of step back and look at our
Look at our information diet that any of us consumes, even if we are supporting independent media and we, you know, we are practicing good media literacy. once again as a as a communication strategist, I observe patterns and narratives, and sometimes they behave like weather. You see it spin up and you see narratives come out of nowhere, and then they're all of a sudden they are everywhere. And
A lot of this is algorithmically driven. Sometimes it's manipulated. There are p dark PR companies out there that understand the dark arts of it a lot more. And an a classic example in terms of Australia, you know, One Nation came from being a single pro polling at single percent is now up at 30% in a matter of what, nine months at at best. that
Elliot Costello (22:47)
Yeah. Yeah. Seven or eight months, yeah.
Matt Kendall (22:49)
yeah, now it's not the only thing, but a lot of that has been a manipulation of algorithmic re media.
Tapping into discontent, of course, off the back of of of a of a few events, including the Bondi massacre, including the the CGT and negative gearing. But it was off the back of these events, you start I started to see accounts with seventy or so followers essentially spinning the the same kind of talking points. So this is really starting to affect our drinking water if in terms of and in terms of information that we're
consuming and trying to make sense from.
Elliot Costello (23:28)
Yeah. I mean, look, these private individuals do not have the community's best interests at heart. And and you've sort of made the case for that too. The motivation is very linear. it's for profit and power. That's clear. so the th that needs to be called out. We need to break apart the myth that this sort of startup
enterprising, entrepreneurial community is here for us, here to build products and services for us. They're not. They're building products for themselves to accumulate power, profit. And it's a race between a handful of individuals to become that supreme dominant power. you know, Musk's doing a great job with it at the stage, but, you know, Peter Thiel's not far behind and they're they're all in cahoots to it to some degree. so
The challenge is first step is awareness, knowing the tools we use, who the who it's owned by, how the algorithm affects us, as as you're clearly saying, and how it weaponizes modern democracy. we haven't even mentioned the the, you know, quote that Peter Thiel wrote himself about his belief that freedom and democracy are not compatible. So just think about that for a moment. Like Peter Thiel, part of the PayPal Mafia, as you've outlined.
so significant in the global defense apparatus has publicly stated that freedom and democracy are now not compatible. So
Matt Kendall (25:01)
And
a company and a company that he has a major stake in, Palantir, is so embedded into the defense and national security state that the CIA co-invested in it. So how somebody who has a belief like that, that it that is that came from outside of America, is is allowed in like that is is is really a primary concern. And when you look at the typology of Peter Thiel.
You know, he is he wrote in his book Zero to One, he doesn't like competition. He wants monopoly domination of a market. And, you know, these guys, you know, David Sachs is a is another another VC. They're VCs. Their whole modus operandi is to go in to markets or businesses that have an incumbent that people are generally dissatisfied with.
Find a disruptive player and fund them to disrupt it. And I think that's literally what they're doing right now. it it's you know, Tommy Robinson, you know, Musk backing Tommy Robinson in the UK. It's Trump in America, it's likely going to be the the the likes of Pauline Hansen in Australia. And I think, you know, once they've got because they've got that inside outside grip, it's almost like a pincer movement.
We've really got to be cognizant of the fact that that that governments are increasingly expressing their power, as I I think I mentioned earlier, through through technology. But then on the other side is the way that we are then resisting against that power is also through these platforms and technology and these communications platforms. So they've got control over that as well, which is really, really concerning.
Elliot Costello (26:43)
Which is the core of the danger and a a a nice way to wrap, this episode up because I think this is gonna be multi part. You know, we we need to look at some of these individuals in isolations to understand where they've come from and where they're going. but you know, the the reality is politicians can be voted out. Okay. Not always easy, you know, sometimes difficult and messy, but they are responsible for every election cycle turning up and asking for permission to operate again or
you know, continue. owners of these platforms are very different. We we don't get to vote them out. You know, we are consumers of the products they're building. And at best the regulation is catching up about five years after these products are in market and have already created such a disastrous and catastrophic impact. and that's the sort of incentive structure we need to change. so yeah
Look, so much more to unpack here, Matt. don't know if you've got any final comments, but yeah, it's
Matt Kendall (27:45)
Yeah, no,
I think all all I'd say is it's it's just that developing that media literacy, understanding how these algorithms and quite often the people on them are manipulating your biases in in order to get reactions from you that can then, you know, w serve serve their ends.
You know, as we've called out, they're the interests of of these oligarchs are are not ours.
And I think to to look for alternatives. Look, you know, Substack is an example. They're they're certainly not whiter than white, but you know, starting to build alternatives, look for alternatives and just r I suppose really be cognizant of what is of the water that we're swimming in in terms of the information that we're receiving and how we're trying to make sense because we're increasingly it's not just these platforms, it's also AI. We're outsourcing a lot of our sense making.
and we need to be really careful about who we do that with and how we do it as well.
Elliot Costello (28:44)
A nice call to action and way to wrap up a an episode focusing on that, you know, clear crossover and between, you know, big tech and the the private state.
Matt Kendall (28:57)
Yeah, I agree. Well, have a great weekend, Elliot. and of course, make sure that you subscribe to Substack or our YouTube or wherever you listen to your podcasts. and we'll be back to see you next week again for another topic worth knowing.